Light, sweet crude oil prices briefly dropped below $50/bbl on the New York market on July 20 for the first time since April but regained some support to settle at $50.15/bbl—the lowest settlement since Apr. 2.
Early in July 20 trading, the low for the day touched $49.85/bbl. Analysts noted the August contract expires with the July 21 settlement.
Analysts said a stronger dollar appears to be discouraging investors from spending money on commodities. Light, sweet crude was down for a fourth consecutive trading session as of the July 20 settlement while Brent crude oil prices on the London market had declined for two consecutive sessions.
Tim Evans at Citi Futures said concerns about the likelihood of more Iranian crude oil eventually reaching world oil markets also contributed to declining oil prices.
The United Nations Security Council on July 20 unanimously approved a resolution that creates a basis for lifting UN sanctions against Iran. The council’s resolution came after Iran and six world powers on July 14 announced they reached a tentative agreement on Iran’s nuclear program.
US leaders, including Congress, have yet to review and approve the agreement. The UN resolution has no legal bearing on separate sanctions imposed against Iran by US and Europe leaders. Separately, European Union foreign ministers approved the Iran nuclear deal on July 20, setting up the process for the lifting of EU sanctions in the future.
The natural gas contract for August was down 4.7¢ to a rounded $2.82/MMbtu. The Henry Hub, La., gas price was $2.84/MMbtu, down 2¢.
Heating oil for August edged down less than a penny to remain at a rounded $1.66/gal. The price for reformulated gasoline stock for oxygenates blending for August rose by a fraction of a penny to remain at a rounded $1.93/gal.
The September ICE contract for Brent crude decreased 45¢ to $56.65/bbl on July 20. The October contract was down 47¢ to $57/bbl. The ICE gas oil contract for August fell 50¢ to $511.25/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for July 20 was $53.79/bbl, down 20¢.
Contact Paula Dittrick at email@example.com.
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.